It Takes Reaffirming to the IRS that Symphony Orchestras are of Public Value

According to the League of American Orchestras, U.S. symphonies are in great danger having to pay a ticket sales tax under internal revenue code. In order to prevent this from happening, the League of American Orchestras and these nonprofit organizations must be able to prove their level of public value among consumers and communities.


Currently, all American symphony orchestras are classified as tax exempt organizations. Do you remember the criteria for being considered a nonprofit organization? Their main purpose is to benefit the community, not to make a profit. But how does the government acquire the proof that it is really executing that mission?


Notice, a for -profit organization's purpose is to maximize revenues and values to shareholders. The IRS can easily deduce from data whether an organization's revenues are increasing or decreasing and how they are spending profits, which gives them the evidence to classify them as "for-profit" so they can demand a federal income tax payment.


One of the issues here is that nonprofit organizations DO try to maximize their revenues as well, and the IRS may not realize that they generate this revenue in order to recycle it back into the company and continue to serve the community.


If all American symphony orchestras fail to keep their tax exempt organization status, I can only imagine that the overall quality of life in this country would decrease exponentially. As an art form with origins that can be traced back to the Renaissance period, music, or more specifically, symphony orchestra performances have become something sacred should not be taken for granted or abused.



I strongly believe that if the IRS imposed a ticket sales tax and, symphony orchestras would go out of business very quickly. Some ways in which they would suffer would be:

• Donors with lower incomes might revoke their contributions or at least decrease their gift amounts. In result, a ticket sales tax would cause double the impact on available funding.
• Regular subscribers might stop their subscriptions or turn to single-ticket buying
• Lower cash reserve would force symphony orchestra executives, board members and personnel out of jobs; nearly guaranteeing operational instability

I have yet to hear about one symphony orchestra that does NOT attempt to improve their surrounding communities in some form or another. I may have mentioned some of these tactics in previous blogs, but symphonies attempt to benefit the public by:

• Educating their audiences about music history
• Serving as a motivational, educational and/or musical standard for young musicians
• Partnering with other nonprofit organizations as marketing aids for each other, which often results in reaching out to newly enlightened audiences.

In addition, studies have PROVEN that music is an irreplaceable healing and coping mechanism for the human body and mind whether for illnesses or for everyday situations. A great amount of ticket buyers attend because they actually enjoy listening to and watching live symphony orchestra performances. In this case, symphony orchestra performances improve the overall health of their communities at least slightly.


In my opinion, music and general education go hand in hand. For this reason, both of these things should be equally as preserved, but since the downfall of the economy, they have been poorly funded and maintained. How would future generations survive without a quality foundation in both performing arts and education? The League of American Orchestras and every American orchestra needs to work together to inform the IRS that symphony orchestras cannot be burdened with the additional expense of ticket sales tax, since it would make a negative impact not only on symphony orchestras, but also on education.


Managing symphony orchestras in this changing environment requires development of a new strategy to convince the IRS and the general U.S. public that symphonies ARE invaluable assets to each and every community and their tax exempt organization status should not be taken away. Nonprofit organizations are tax-exempt under Internal Revenue Code, and a symphony orchestra should not be an exception to the rule.


This subject is a real concern to me, as I hope to enter this career path in the near future! This blog post is my contribution to helping symphony orchestras prove that they deserve to retain their tax exempt status. I would love to hear your thoughts about this potential symphony orchestra ticket sales tax creation or about the supposed decline of the symphony's public value and importance.

-Liz